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Decoding the Dynamics of Development Charges Development charges are fees levied by municipalities on developers, homebuilders, and institutions when they undertake construction or development projects on land. These charges help municipalities cover the costs of additional municipal services and infrastructure necessitated by population growth from the new development. The funds can be allocated towards both ‘hard services’ like roads, waste management, and water, as well as ‘soft services’ like parks, libraries, and recreation centers. Legislative Framework Ontario introduced the Development Charge Act in 1989, with significant updates in 1997. This Act guides municipalities on the establishment of development charge by-laws. To establish a new by-law, municipalities must first conduct a background study. This study, which must be updated every five years, outlines projected population growth and the associated service and infrastructure needs. The Act also clarifies the specific services that can be funded by these charges. Determining Population Growth and Charges Background studies delve deep into projected growth, both residential and non-residential. They also look at future capital costs and service levels. It’s crucial for developers to understand a municipality’s charge calculation process. Typically, information on development charge by-laws and background studies can be accessed on the municipal website. The Ontario Municipal Board (OMB) sometimes gets involved in disputes over these studies. Challenging the By-Law There have been instances where municipalities’ calculation methods for development charges have been found inconsistent with the Act. The OMB can hear appeals against a by-law, provided they are filed within 40 days of its passage. For instance, in past cases like the one involving Orangeville and another with Clarington/Markham, the OMB ruled that the respective municipalities’ methods of calculating growth were not in line with the Act. Addressing Incorrect Charges Mistakes can happen in the determination of development charges. If developers believe they’ve been wrongly charged, they can raise a complaint with the municipal council within 90 days of the charge’s due date. The council is then obligated to hold a hearing where the complainant can present their case. If the council’s decision is still unsatisfactory, the decision can be appealed to the OMB within 40 days. Related posts 04 October 2023 Decoding the Dynamics of Development Charges Decoding the Dynamics of Development Charges Development charges are fees levied by municipalities on… 30 September 2023 Facts about Closing and Occupancy Delays How to Prepare Your Canadian Home for Winter If you’re buying a home or condo during its pre-construction… 30 September 2023 5 tasks to be accomplished by the end of Pre-delivery Inspection 5 tasks to be accomplished by the end of PDI. When your new home is complete and ready for occupancy,… 26 September 2023 How to Prepare Your Canadian Home for Winter How to Prepare Your Canadian Home for Winter Canada’s winter, characterized by freezing temperatures,… 22 September 2023 Why does Canada restrict foreign homebuyers? Why does Canada restrict foreign homebuyers? Experts are skeptical that Canada’s restriction on… 22 September 2023 Canada’s restriction on foreigners purchasing property may affect Indian non-residents demand Canada’s restriction on foreigners purchasing property may affect Indian non-resident demand The… 18 September 2023 Canadians debate foreign students limit over housing problem Canadians debate foreign student limit over housing problem To combat the country’s soaring housing…

How to Prepare Your Canadian Home for Winter If you’re buying a home or condo during its pre-construction phase, you and the seller or builder will likely negotiate a move-in date. ​ This is the “closing date,” or “settlement date,” for freehold properties. This is often referred to as the “occupancy date” for condos. ​ This date might shift for a number of reasons. Additional lodging, transportation, and storage charges may accrue if there are closing and occupancy delays. ​If your vendor or builder fails to provide you with enough notice of a delay or if the construction of your house is delayed over a specific date, you will be reimbursed for the delay under the delayed closing/occupancy coverage of your new home warranty. ​ Refer to Your Addendum The Addendum to your Purchase and Sale Agreement contains information on your closing/occupancy date and the delayed closing warranty.​ Please give the Addendum your full attention.​ This document begins with a Statement of Critical Dates that specifies: ​ Closing and occupancy date extensions (if any) and when the vendor/builder anticipates work to be finished and you may expect to move in; Deadlines by which your contractor or supplier must inform you of a delay Closing Date Types​ A Firm Closing/Occupancy This option is available if the seller or builder guarantees that the house will be finished by a certain date.​ A Tentative Closing/Occupancy Date If the seller or builder is unsure of when the house will be ready for occupancy, they might utilize a “tentative closing/occupancy date.” Firm Closing/Occupancy Date The vendor/builder is obligated to pay for the inconvenience of a delayed closure or occupancy date if the Firm closure/Occupancy Date they established is missed. Tentative Closing/Occupancy Dates​ Freehold Homes If the vendor/builder gives you enough notice, they may push out the closing date two more times by up to 120 days each time.​ Condominiums​ If the vendor/builder gives you enough notice, they may push back the estimated move-in date many times without paying you more.  The Outside Closing/Occupancy Date Your vendor or builder will be able to accommodate you until the Outside Closing/Occupancy Date. Typically, a year must pass between the Firm Closing Date and the Second Tentative Closing Date for a freehold property. Condominium closing dates are established between the buyer and seller at the time of contract signing. ​ You have 30 days from the Outside Closing/Occupancy Date to cancel the agreement if your house is not ready for occupancy. The buyer has the right to cancel within this time. You are entitled to delayed closing/occupancy compensation and the return of any funds supplied if you cancel the Agreement. Related posts 30 September 2023 Facts about Closing and Occupancy Delays How to Prepare Your Canadian Home for Winter If you’re buying a home or condo during its pre-construction… 30 September 2023 5 tasks to be accomplished by the end of Pre-delivery Inspection 5 tasks to be accomplished by the end of PDI. When your new home is complete and ready for occupancy,… 26 September 2023 How to Prepare Your Canadian Home for Winter How to Prepare Your Canadian Home for Winter Canada’s winter, characterized by freezing temperatures,… 22 September 2023 Why does Canada restrict foreign homebuyers? Why does Canada restrict foreign homebuyers? Experts are skeptical that Canada’s restriction on… 22 September 2023 Canada’s restriction on foreigners purchasing property may affect Indian non-residents demand Canada’s restriction on foreigners purchasing property may affect Indian non-resident demand The… 18 September 2023 Canadians debate foreign students limit over housing problem Canadians debate foreign student limit over housing problem To combat the country’s soaring housing… 18 September 2023 Toronto homebuilding slows as developers halt or cancel projects Industry Responds to Feds Removing GST On New Rentals Despite the province’s new plans to reach…

5 tasks to be accomplished by the end of PDI. When your new home is complete and ready for occupancy, the builder will lead you on a walkthrough known as the pre-delivery inspection (PDI). If purchasers of freshly constructed houses follow this procedure to the letter, they will have a far better time as homeowners in the years to come.  But how can you tell whether an examination has been thorough? When leaving their PDI, homebuyers should have the following:  A comprehensive set of points that need further work Use the Pre-delivery Inspection form the builder’s rep gives you to document any defects, deficiencies, or omissions you find in the property. Verify all information on the PDI form is correct before signing. Get Tarion’s PDI Checklist to know what to check for during the inspection. Familiarity with house operations and upkeep The PDI is both an inspection and an introduction. Here is your opportunity to get the most out of your home systems (such your HVAC) and learn how to maintain them correctly so that they serve you well for many years. If you have any questions, now is the time to ask them. Your warranty document The builder’s agent will supply you with a Certificate of Completion and Possession/Warranty Certificate to sign and a copy of the document for your records. This deed confirms that you have taken possession of the residence. Thus you entitled to the benefits of the New Home Warranty Program. Your home’s enrollment number and the date your warranty coverage began are also included on the certificate. User guides and warranty paperwork Appliances like the refrigerator, stove, and dishwasher in your new house each have their own user manual and warranty from the manufacturer. You must acquire all information pertaining to these appliances. Since they are often not covered by your new home warranty, even if they have been delivered by your builder. Methods of communication and subsequent procedures After completing the Pre-delivery Inspection, you should have a strategy in place. When and how will future repairs to your house be scheduled? Even if there is nothing further your builder has to do right now, you should still have their contact information if you have warranty questions or concerns. Related posts 30 September 2023 5 tasks to be accomplished by the end of Pre-delivery Inspection 26 September 2023 How to Prepare Your Canadian Home for Winter How to Prepare Your Canadian Home for Winter Canada’s winter, characterized by freezing temperatures,… 22 September 2023 Why does Canada restrict foreign homebuyers? Why does Canada restrict foreign homebuyers? Experts are skeptical that Canada’s restriction on… 22 September 2023 Canada’s restriction on foreigners purchasing property may affect Indian non-residents demand Canada’s restriction on foreigners purchasing property may affect Indian non-resident demand The… 18 September 2023 Canadians debate foreign students limit over housing problem Canadians debate foreign student limit over housing problem To combat the country’s soaring housing… 18 September 2023 Toronto homebuilding slows as developers halt or cancel projects Industry Responds to Feds Removing GST On New Rentals Despite the province’s new plans to reach… 16 September 2023 Industry Responds to Feds Removing GST On New Rentals Industry Responds to Feds Removing GST On New Rentals During his closing comments at the National Caucus…

How to Prepare Your Canadian Home for Winter Canada’s winter, characterized by freezing temperatures, heavy snowfall, and ice storms, requires homeowners to adopt preventative measures to ensure their home remains warm, safe, and energy-efficient. This guide explores essential steps for preparing your home for winter, helping you enjoy a cozy and hassle-free season. Inspecting and Cleaning the Heating System Before winter hits, ensure your heating system is functioning optimally. Schedule a professional inspection to assess the condition of furnaces, boilers, and chimneys. Clean or replace filters and remove any dust or debris from vents and ducts to improve efficiency and reduce fire hazards. Sealing Gaps and Cracks Examine the exterior and interior of your home for gaps, cracks, or leaks. Seal any found using caulking or weatherstripping to prevent cold air infiltration and heat loss, thereby reducing energy consumption and lowering heating bills. Installing Storm Doors and Windows Invest in storm doors and windows to add an extra layer of insulation in your home for winter. These installations are designed to withstand severe weather conditions, protecting your home from snow, ice, and wind while minimizing heat escape. Roof and Gutter Maintenance Roofs bear the brunt of winter weather. Inspect your roof for damaged or missing shingles and repair them promptly. Clear gutters of leaves and debris to prevent ice dams and ensure proper water drainage, thereby avoiding structural damage Insulating Pipes and Water Heater Insulate water pipes located in unheated spaces to prevent freezing and bursting. Wrapping your water heater with an insulation blanket can also help maintain water temperature and reduce energy costs. Smart Thermostat Installation Installing a smart thermostat helps in regulating your home’s temperature efficiently. It allows you to adjust heating remotely, ensuring a warm home upon your arrival while saving energy when you’re away. Testing Smoke and Carbon Monoxide Detectors Ensure your safety by testing and replacing the batteries in smoke and carbon monoxide detectors. These devices are crucial in detecting any irregularities, especially when heating appliances are in constant use. Reversing Ceiling Fans Reversing the direction of ceiling fans to clockwise helps in circulating warm air trapped near the ceiling downwards, contributing to even heating throughout the room. Conclusion Preparing your home for winters in Canada can seem daunting, but by following this comprehensive guide, you’ll be well-equipped to face the challenges that the season brings. Regular maintenance, timely inspections, and implementing preventative measures will ensure your home remains warm, safe, and energy-efficient throughout the winter months. Related posts 26 September 2023 How to Prepare Your Canadian Home for Winter 22 September 2023 Why does Canada restrict foreign homebuyers? Why does Canada restrict foreign homebuyers? Experts are skeptical that Canada’s restriction on… 22 September 2023 Canada’s restriction on foreigners purchasing property may affect Indian non-residents demand Canada’s restriction on foreigners purchasing property may affect Indian non-resident demand The… 18 September 2023 Canadians debate foreign students limit over housing problem Canadians debate foreign student limit over housing problem To combat the country’s soaring housing… 18 September 2023 Toronto homebuilding slows as developers halt or cancel projects Industry Responds to Feds Removing GST On New Rentals Despite the province’s new plans to reach… 16 September 2023 Industry Responds to Feds Removing GST On New Rentals Industry Responds to Feds Removing GST On New Rentals During his closing comments at the National Caucus… 16 September 2023 Housing Market Is Becoming More Balanced As Listings Keep Rising Housing Market Is Becoming More Balanced As Listings Keep Rising The decrease in national sales activity…

Why does Canada restrict foreign homebuyers? Experts are skeptical that Canada’s restriction on homebuyers such as non-citizens and foreign-owned firms purchasing properties throughout the nation would be effective in achieving Ottawa’s aim of lowering Canadian property prices. A two-year moratorium on “the purchase of residential property by non-Canadians” was enacted as part of the new housing legislation on January 1. Permanent residents and refugees are immune from the legislation. However, the government’s attempts to “curb unproductive foreign ownership” mean that homebuyers who break the rules may be hit with penalties of several thousand dollars. Canada’s Minister of Housing and Diversity and Inclusion Ahmed Hussen stated last month that the government was “taking action” via the new law to guarantee that all Canadians would benefit from home ownership. In an effort to curb surging home prices in key Canadian cities, lawmakers imposed the ban in June of last year. Low loan rates and rising wages contributed to a sustained increase in home values that reached a new peak during the COVID-19 epidemic. Also, many individuals have been priced out of metropolitan areas as rents have increased. According to Thomas Davidoff, director of UBC’s Centre for Urban Economics and Real Estate, the new rule is unlikely to have any significant impact on the real estate markets of Toronto and Vancouver, two of Canada’s major cities. He claimed that the provincial government had already begun taxing foreign homebuyers of real estate in the province. Davidoff told Al Jazeera that the restriction may have an impact in Canadian towns that do not already levy significant taxes on foreign real estate investments because of the projected decrease in demand. Foreign investment in the market is not a concern. It’s problematic if there are seasonal or second houses sitting unoccupied,” he said. It’s not a big deal if an out-of-towner wants to purchase an apartment and lease it to a local. It seems counterproductive to me to investigate the citizenship of the owner instead of the purpose of the property. Real estate in Canada In 2017, the government of Prime Minister Justin Trudeau released Canada’s first-ever, national housing policy, which included a ban on foreign ownership of residential real estate. New homes, including those for low-income Canadians, will be built as part of the 10-year, multibillion-dollar plan, and purchasers will be incentivized via tax breaks and other measures. Trudeau said that these investments “will put home ownership within reach for more Canadians, protect renters and buyers, and expand Indigenous housing across the country” in the government budget from the previous year. Much of the current worry about rising expenses has been focused on locations with a high concentration of “census metropolitan areas.” Thus the new prohibition only affects properties with three units or less, as well as portions of semi-detached houses and condos in such areas. The Canadian Real Estate Association reported in March 2021 that the average price of a property in the country had risen to a new high of $524,324 ($716,828 Canadian). This is a rise of 31.6% from the previous year. The real estate markets in and around Vancouver and Toronto were major contributors to that increase. According to a survey by the Royal Bank of Canada, a month later, 36% of non-homebuyers under the age of 40 reported having given up hope of ever buying a house. “Renters, who are unable to buy, are spending a disproportionate share of their income on housing. We should be giving it a lot of attention. Penny Gurstein, head of UBC’s housing research collaboration, emphasized the need of providing affordable housing options for individuals of all income levels. As Al Jazeera’s Jonathan Gurstein reported, the government’s ban on foreign homebuyers sends “a message that there is concern about global capital coming into our housing market.” Although it’s yet unknown what impact this would have on pricing. The percentage of Canadian real estate owned by non-Canadians is low. Statistics Canada, a government website, reports that in 2020, non-residents held 2.2% of Ontario homes and 3.1% of British Columbia homes. The urban regions of Toronto and Vancouver had percentages of 2.7% and 4.2%, respectively. Even while there is some international investment, Gurstein claims that other variables are at play. This includes Canadian real estate speculators snapping up buildings. She suggested that the government might do more to solve the affordability crisis by investing more in the construction of co-ops and other forms of social and communal housing. Meanwhile, falling prices as a result of increasing interest rates and falling demand have boosted confidence. Long-term, though, Gurstein argues, transitioning away from the private sector is essential. To paraphrase, “we need to be thinking about housing as infrastructure, housing as a way to encourage other sectors of the economy and not just the real estate industry.” Narrow market niche According to Davidoff from UBC’s Centre for Urban Economics and Real Estate, zoning regulations provide a further long-term obstacle. According to him, most of Canada’s housing acreage can only be used to build detached, single-family houses, which are out of most people’s price ranges. “While the federal government does not have direct control over zoning, it does have the power to tell provinces, ‘You don’t get any money for anything until you ban the practice among your municipalities of enacting restrictive zoning,’” Davidoff said. That, rather than a prohibition on foreign purchases, would have a greater impact. Despite the complexity of Canada’s housing situation, however, immigrants have taken on a disproportionate amount of public responsibility. Vancouver’s significant Asian-Canadian community has been the target of racism. It was reported that affluent investors from mainland China were purchasing high-end residences there. Davidoff told Al Jazeera, “What I like to say is, supporting a ban on foreign buyers doesn’t make you a racist, but if you were a racist, it’s something you would like.” Associate professor at Western University in Ontario Diana Mok told Al Jazeera that the government is attempting to demonstrate. It is taking steps to cut housing prices by singling

Canada’s restriction on foreigners purchasing property may affect Indian non-resident demand The Canadian government has decided to impose a two-year restriction on foreign nationals such as Indian non-residents purchasing real estate in the country. This is done in an effort to increase the supply of and access to affordable housing for Canadian people. Experts in the real estate market predict that this change would lower demand among Indians non-residents who are not permanent residents of Canada. The ruling stipulates that the prohibition will go into force on January 1, 2023. This will be done with the exception of refugees and permanent residents. The restriction would also be limited to urban homes rather than include suburban or rural properties. During his 2021 election campaign, Canadian Prime Minister Justin Trudeau advocated the idea to curb soaring real estate costs. The Liberal Party of Canada has previously said, “The desirability of Canadian homes is attracting profiteers, wealthy corporations, and foreign investors.” “Canada has built a reputation as a multicultural nation that welcomes people from around the world,” the Canadian Real Estate Association (CREA) stated in a statement. The proposed ban on foreigners buying homes in Canada might hurt the country’s image as a friendly place for Indian non-residents. “The potential benefits of the ban are likely to be modest,” it said. Related posts 22 September 2023 Canada’s restriction on foreigners purchasing property may affect Indian non-residents demand 18 September 2023 Canadians debate foreign students limit over housing problem Canadians debate foreign student limit over housing problem To combat the country’s soaring housing… 18 September 2023 Toronto homebuilding slows as developers halt or cancel projects Industry Responds to Feds Removing GST On New Rentals Despite the province’s new plans to reach… 16 September 2023 Industry Responds to Feds Removing GST On New Rentals Industry Responds to Feds Removing GST On New Rentals During his closing comments at the National Caucus… 16 September 2023 Housing Market Is Becoming More Balanced As Listings Keep Rising Housing Market Is Becoming More Balanced As Listings Keep Rising The decrease in national sales activity… 07 September 2023 The Bank of Canada Pauses Rate Hikes in September 2023 The Bank of Canada Pauses Rate Hikes in September 2023 Three rate increases this year have been effective… 05 September 2023 The Toronto Real Estate Dilemma: Renting vs. Owning The Toronto Real Estate Dilemma: Renting vs. Owning In the bustling city of Toronto, finding the perfect…

Canadians debate foreign student limit over housing problem To combat the country’s soaring housing prices, Canadian Housing Minister Sean Fraser has proposed a restriction on the number of foreign students allowed into the country. It was “one of the possibilities that we should think about,” he added. His comments come as Canadian Prime Minister Justin Trudeau comes under fire for his handling of the country’s housing problem. Universities and the province of Quebec quickly reacted negatively to Mr. Fraser’s comments, saying they would oppose any moves to restrict the number of overseas students studying in their jurisdictions. More over 800,000 foreign students enrolled in Canadian universities in 2022, a 75% rise from only five years before. Minister of Immigration Marc Miller responded to Mr. Fraser’s comments by saying Canada will review its immigration objectives to see whether or not it eases the housing shortage. Canada has pledged to admit 1.5 million more immigrants by 2025. But how they plan to do so in the face of a lack of housing is raising serious concerns. How terrible is Canada’s housing market? Many people in Canada have ongoing problems coming up with the money to cover their monthly housing costs. As of the month of August, the average price of a house in Canada was close to C$750,000 ($550,000; £435,000). That is an increase of 360% from the average of C$163,000 in 2000. In major urban centres like Toronto, where a household income of six figures is required to own a home, this problem is significant. In cities like Toronto and Vancouver, it’s not uncommon for home prices to exceed C$1 million. The Dermographia International Housing Affordability Index consistently ranks both of these cities, along with others like Hong Kong and San Francisco, as two of the world’s ten most expensive places to live. The cost of renting a home or flat is likewise rising in Canada’s largest cities. A one-bedroom flat in Toronto now costs an average of C$2,500 per month, a 25% rise from the previous year. Canada’s smaller communities have seen the effects of the housing crisis in recent years. It’s been going on for years, and politicians at all levels have pledged to do something about it for years. There is a scarcity of dwellings because immigration is fueling a population boom. This is further outpacing the construction of new homes. Canada’s national housing agency estimates that the country would need to construct 5.8 million new dwellings, including 2 million rental units, by 2030 to address the issue. Will limiting foreign students help? The government has implemented a variety of responses in recent years. One such measure, implemented in January, bans foreign ownership of property in an effort to lessen market competition. Professor of public policy and founder of a housing think tank Paul Kershaw said that although foreign ownership and population growth contribute to Canada’s housing woes, they should not be singled out as the main culprits. “They are easy targets because it lets the rest of us and Canada think we’re not entangled in this issue, and we are,” he said. Prof. Kershaw said that growing property prices are beneficial to present homeowners. Further contributing to a discriminatory society between those who own and rent. Statistics Canada projects that by 2020, the real estate market will account for 13% of Canada’s total GDP, more than any other sector of the economy. For those with the means, this industry represents a significant contributor to economic development and a potentially profitable investment opportunity. As Prof. Kershaw put it, “homes first and investment second” is the only way for Canadians to see real estate. It’s no news that there are difficulties in locating cheap off-campus accommodation for overseas students like Amin Kamaleddinezabadi. The Iranian man, 30, who has recently earned his doctorate in biomedical engineering from the University of Toronto, told the BBC that landlords often need him to pay rent for a whole year in advance, even though they don’t have a credit history in the country. He claimed that the cost of renting a place to live has only gone up since he started college in 2016. “Most foreign students rely on their own funding, and with the higher tuition fees they pay, it can be a really big burden for them financially,” Mr. Kamaleddinezabadi said. Despite these difficulties, he has found many positive aspects of his current life in Toronto. There might be unintended consequences if Canada drastically reduces its intake of overseas students, he said. He said that international students who study in Canada become integral members of society. They contribute significantly to the country’s long-term economic success. Because of Canada’s long history with housing shortages, the government should give them preference in any immigration programme without discriminating against them. Universities Canada, an organisation that speaks for hundreds of colleges and institutions in the country, issued a statement in which it expressed “deeply concerning” about the idea of linking foreign students to the housing situation. Professor Kershaw said that the government must take a multifaceted response to the housing crisis. The importance of real estate to Canada’s economy and the related issues of housing affordability and availability must be addressed. 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Industry Responds to Feds Removing GST On New Rentals Despite the province’s new plans to reach its lofty target of creating 1.5 million new houses by 2031. Homebuilders in the Toronto homebuilding region say a perfect storm of variables has many real estate developers halting or cancelling new projects. According to Richard Lyall, head of the Residential Construction Council of Ontario (RESCON), just because a builder has a construction permit doesn’t mean he has to build. Some builders own property and are ready to start construction, but they will not lower their pricing to compete with the competition. They may relax on the farm and wait for things to become more predictable. That agrees with the findings of the Housing Market Index (HMI), a quarterly study compiled by the Canadian Home Builders’ Association (CHBA) via surveys of homebuilders. The CHBA reported on its HMI for the second quarter on August 9 that 22% of builders were discontinuing projects and 67% were reducing the number of homes they were constructing. According to many familiar with the sector, the business has been hit hard by a perfect storm of increasing prices and weakening demand as a result of the Bank of Canada’s interest rate rises. “We launched a condo project in late June, and that launch, we were pretty confident in the Pickering market,” Highmark Homes’ Joseph Messina said. There was a lot of curiosity, so we distributed 800 leaflets and info packets. But no one seems interested in joining up. I don’t believe the interest rate is the problem; it’s the unknown future. Many of the problems that homebuilders and property purchasers in the province face are reflected in the history of Mr. Messina’s firm. After 30 years of constructing low-rise residences, the family firm has taken on its first high-rise condominium project, The Highmark, which will contain 346 units between Brock Road and Kingston Road in Pickering, Ontario. Buyers in Durham Region could no longer afford to purchase a single-family house for what it would cost his firm to construct one, which contributed to the trend towards high density in the Toronto homebuilding. We couldn’t afford to ignore 60% of our customer base by not entering the high-density sector, so we did. Consistent rises in material prices over the last several years have put many homebuilders in the unenviable position of being unable to sell enough houses to make a profit. Costs have risen across the board in Canada, but according to David Wilkes, president and CEO of the Building Industry and Land Development Association (BILD), the Greater Toronto Area (GTA) has been hit especially hard. Overall expenses, including timber, concrete, steel, and labour, have increased by 63% for the GTA apartment sector and 85.4 % for single-family houses between the beginning of 2019 and the beginning of 2023, he added. Mr. Wilkes said, “That’s much higher than the national average.” That has an effect on project viability, and the present interest rate policy has reduced demand. On Wednesday, BILD and real estate consultants Altus Group revealed data showing that new house sales in the GTA are at an all-time low: The 1,190 new houses sold in July were the fewest in the last decade and were below the 10-year monthly average by 50%. This pattern has persisted throughout the year: the Greater Toronto Area has sold 12,189 new houses (including both detached and condo units) so far this year, 43% less than in the same period during the previous decade. The Greater Toronto Area saw the sale of about 26,800 new properties by the end of July 2021. Prices for both flats and new homes have dropped by nine and thirteen percent, respectively, as Altus reports that demand has slowed. However, revenue is decreasing at a slower pace, leading to cancellations. Mr. Wilkes and Mr. Lyall blame the skyrocketing cost of new buildings on the HST (which is still calibrated for a world where a new house would cost less than $400,000, whereas most new homes cost twice that) and the ever-increasing cost of local development fees. “We’re taxing housing like alcohol, like a sin tax,” Mr. Lyall remarked. Mr. Messina counters that development fees have become a drug for local budgets. The development fees in Pickering rose by 50% from the previous year, from $39,000 for a one-bedroom condo to $68,000. Economists like Mike Moffat and other urbanism and housing experts in Toronto homebuilding sector have started to characterise the problem as one needing a “war time effort” in order to overcome the shortage of housing and affordable housing choices. It’s more difficult than that, according to Mr. Lyall of RESCON: “People have questioned can we create 1.5 million homes? Yes, if our pitchers throw a perfect game. According to Mr. Lyall, even if municipal fees and federal taxes are resolved, construction costs must be addressed; more skilled construction labour must be added; builders must have access to affordable loans and credit; customers must be able to afford the products and services you offer; and land on which to construct must be serviced before construction can begin. Never mind that obtaining the necessary permits often takes longer than the time it takes to build the structure itself. “Building is easy, we can all build a house,” Mr Messina remarked. The challenge is paying for it. 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Industry Responds to Feds Removing GST On New Rentals During his closing comments at the National Caucus Retreat on Thursday in London, Ontario, Canadian Prime Minister Justin Trudeau made the unexpected but very welcome announcement that the government will be abolishing the GST on new rentals project. Developers of new rental buildings were formerly required under so-called “self-supply” requirements to pay the 5% GST on the project’s fair market value. This included construction expenses and land value, upon its completion. (Rebates are offered on properties with a fair market value of $350,000 and $450,000. Although many people don’t find that range to be very beneficial.) On the other hand, developers of strata condos could avoid GST by having purchasers pay it themselves. While many people would like to see more rental housing constructed, the reality is that developers face several obstacles to doing so. The greatest of which is the Goods and Services Tax (GST) and its impact on the construction industry. Although the GST is still 5%, construction costs have increased in recent years. Thus, the 5% is charged on the project’s fair market value, which factors in construction costs. Furthermore, resulting in an increase in the amount developers must pay. Renters and the general public are affected because those who can afford to pay the 5% tax and the greater expenses of financing and building, among other things, will have to charge more to recoup their losses. After being elected in 2015, the Trudeau Liberals pledged to make the change, only to publicly back down in 2017 when they realised the promise would cost them an estimated $125 million year in tax income. When challenged about this reversal at today’s event, Trudeau said that the 2017 decision was taken because they thought the Rental Construction Financing Initiative was preferable. “It was the right programme at the time,” Trudeau remarked of the initiative. “But now, with interest rates where they are, and given the challenges that people have in building new apartment buildings, we realise it’s the right time to step up with removing federal GST on purpose-built apartment buildings.” According to Larry Greer, Senior Vice President of Government Relations for CAPREIT, who has made formal recommendations to the federal government to make this change in recent years during budget consultations, “the industry has been in broad agreement that this is a measure the government can implement to really encourage additional purpose-built [rental] construction.” Greer believes the GST has always been a problem. However, it has worsened as the cost of building, borrowing money, and paying for local permits and licences has increased. He also explains that “removal of the GST/HST will not allow all projects to pencil out.” In other words, “for some projects, it will take a lot more than that,” but “for some projects, I think that will move the needle for sure.” Toronto-based Harbour Equity senior vice president of investments Josh Lerner says his company has been looking at rental projects where economic feasibility has been “tight” and adds that eliminating the GST will make a big impact. To quote him: “For the GST, it usually works out to three or four percent of the project in terms of [total] costs, so if you take that out, it really does give you the margin you need to go ahead.” “Today I would feel much more comfortable making an investment that I wouldn’t have done yesterday.” According to Lerner, there have been speculations floating around the business over the last several weeks that something like this may be on the horizon, thus today’s statement was not entirely unexpected. Minister of Housing Sean Fraser and Minister of Finance Chrystia Freeland made the statement, which suggests that the Ministry of Finance had a significant role given the topic’s potential tax implications. Although there is not too much small print in today’s statement, Cynthia Jagger, Principal at Vancouver-based brokerage Goodman Commercial and Vice Chair of the Urban Development Institute’s Rental Housing Issues Committee, believes that a few concerns still need to be answered. The first concern is whether the GST removal would apply to recently finished building projects or only to projects that finish construction after today. There is also the matter of whether or not there will be restrictions on the size, kind, and construction of rental properties. Whether or if this policy shift, like the foreign buyer restriction, will have a sunset provision is likewise unknown. Trudeau did not provide a timeline for the move, just that legislation will be introduced to implement it. Most of these new rental projects need CMHC‘s funding programmes to get off the ground, so Jagger hopes the federal government will address the backlog with greater clarity on the abolition of GST. I’ve heard that there are now incredibly high wait times and that 4,600 applications were submitted before the deadline for the price rise. Still, it’s a step in the right direction for Canada’s rental housing market. Michael Geller, a real estate consultant and developer based in Vancouver, says he is not surprised by the government’s action, despite the industry’s repeated requests over the past 20 years, and that the next step the Government of Canada should take is reviving the Multi-Unit Residential Building (MURB) programme from the 1970s and 1980s, which allowed investors to write off their real estate project expenses. 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Housing Market Is Becoming More Balanced As Listings Keep Rising The decrease in national sales activity seen in August is usual for the end of summer but shows the full impact of the Bank of Canada‘s rate rise in July. The effect of the Bank of Canada’s decision to stop rate rises in September remains to be seen. National house sales were down 4.1% month over month, according to to the Canadian Real Estate Association. However, on the bright side, this gives the housing market and supply a chance to increase. Start of 2023 Sees an Increase in Housing Availability There has been a severe lack of housing inventory during the most of 2023 in the housing market, driving up both competition and costs. With many potential buyers away on vacation, August saw a slight uptick in new listings. There was a little rise in new listings from July to August, the real improvement occurred from March to July. In these months there was a total gain of more than 24%. As a result, the SNLR (sales-to-new-listings ratio) has returned to a more normal level. The SNLR peaked in April at 67.4%, indicating a sellers’ market, and by August it had fallen to a more even 56.2%. Reduced buying and selling means lower prices everywhere In August, sales and demand slowed, leading to a 1% drop in the national benchmark price to $750,100. Saint John, Quebec City, and the Montreal CMA all had month-over-month price increases of 1.6%, 1.3%, and 0.3%, respectively, while inflation in Quebec and the East Coast remained stable. While Greater Vancouver, the Prairies, and most of Ontario had month-over-month price drops, Calgary was the only big region with a price gain. Prices in Kitchener-Waterloo fell by 2.6% month-over-month to $745,100. Prices in Regina fell by 1.9%; and prices in the Greater Toronto Area were down by 1.6%. If you’re thinking of buying, selling, or doing both this autumn, you should see a real estate agent in your region to find out what the housing market is like. Related posts 16 September 2023 Housing Market Is Becoming More Balanced As Listings Keep Rising 07 September 2023 The Bank of Canada Pauses Rate Hikes in September 2023 The Bank of Canada Pauses Rate Hikes in September 2023 Three rate increases this year have been effective… 05 September 2023 The Toronto Real Estate Dilemma: Renting vs. Owning The Toronto Real Estate Dilemma: Renting vs. Owning In the bustling city of Toronto, finding the perfect… 03 September 2023 Canada’s Real Estate Bracing for Historic Price Plunge: RBC Canada’s Real Estate Bracing for Historic Price Plunge: RBC Canada’s biggest bank, RBC, believes… 29 August 2023 Ontario’s Closing Process: A Comprehensive Guide Ontario’s Closing Process: A Comprehensive Guide Welcome… 29 August 2023 Tips on Navigating the Real Estate Closing Process in Ontario Tips on Navigating the Real Estate Closing Process in Ontario Embarking on the journey to own your dream… 29 August 2023 FAQs: Navigating the Real Estate Closing Process in Ontario FAQs: Navigating the Real Estate Closing Process in Ontario What’s the difference between a deposit…

The Bank of Canada Pauses Rate Hikes in September 2023 Three rate increases this year have been effective in slowing the economy, as seen by the announcement of GDP data for June and the second quarter of 2023. Many Canadians will breathe easier now that the Bank of Canada has indicated it would temporarily halt its current 5% overnight lending rate. Weaker growth in the Canadian economy is required to ease pricing pressures, and this era has begun. In the second quarter of 2023, economic growth slowed dramatically, with production falling by 0.2% on an annualised basis. This was due to “wildfires’ effect on many regions of the country and a marked weakening in consumption growth and a decline in housing activity,” the announcement said. Implications for Canada’s Real Estate Market this Autumn Once Canadians return to their usual routines in the autumn, real estate activity usually picks back up after a slow summer. After months of volatility, it’s hard to anticipate how the autumn market will unfold. September could be slow. Therefore, sellers are waiting until September to decide whether or not to offer their homes. This is because they are worried about rising interest rates and a lack of news coverage throughout the summer.  However, there will always be interested consumers, and a shortage of products might eventually lead to a price drop. The new listings might reach a high point in October because of the historically low supply of properties. Big Banks are increasingly reliant on Extra-Long Amortisations While the rate freeze is welcome news, Canadians already feel the pinch of increased rates. They have begun looking for extra-long amortisations to reduce their monthly payments. In their third-quarter results reports besides the Bank of Canada, RBC, TD Bank, CIBC, and BMO, four of Canada’s largest banks, all said that 40 percent of their existing mortgage clients had loans with terms longer than the customary 25 years. A longer amortisation time may make your mortgage payments more manageable, whether you apply for a new mortgage or refinancing. The amortisation lengths offered by many of the largest banks have increased to 30 years. While some alternative lenders may go as high as 35 years.  Related posts 07 September 2023 The Bank of Canada Pauses Rate Hikes in September 2023 The Bank of Canada Pauses Rate Hikes in September 2023 Three rate increases this year have been effective… 05 September 2023 The Toronto Real Estate Dilemma: Renting vs. Owning The Toronto Real Estate Dilemma: Renting vs. Owning In the bustling city of Toronto, finding the perfect… 03 September 2023 Canada’s Real Estate Bracing for Historic Price Plunge: RBC Canada’s Real Estate Bracing for Historic Price Plunge: RBC Canada’s biggest bank, RBC, believes… 29 August 2023 Ontario’s Closing Process: A Comprehensive Guide     Ontario’s Closing Process: A Comprehensive Guide Welcome… 29 August 2023 Tips on Navigating the Real Estate Closing Process in Ontario Tips on Navigating the Real Estate Closing Process in Ontario Embarking on the journey to own your dream… 29 August 2023 FAQs: Navigating the Real Estate Closing Process in Ontario FAQs: Navigating the Real Estate Closing Process in Ontario What’s the difference between a deposit… 23 August 2023 Deposit protection lowers homebuying stress     Deposit protection lowers homebuying stress When you put down…

The Toronto Real Estate Dilemma: Renting vs. Owning In the bustling city of Toronto, finding the perfect place to call home is a significant decision that many residents face. One of the most common debates in the Toronto real estate market is whether to rent or own a property. Both options have their own set of pros and cons, making it essential to weigh them carefully to make an informed choice. Let’s explore the advantages and disadvantages of renting vs. owning in Toronto to help you make the best decision for your unique circumstances. The Perks of Renting in Toronto Flexibility Renting offers unparalleled flexibility. Whether you’re new to the city or your lifestyle demands frequent changes, renting allows you to move without the hassle of selling a property. Lower Upfront Costs Renting typically requires a lower initial investment. Moreover, you won’t need a substantial down payment or be responsible for property maintenance costs. Predictable Monthly Expenses Renters can budget with confidence, as their monthly rent remains relatively stable compared to homeowners who face fluctuating property taxes and maintenance expenses. Access to Prime Locations In Toronto’s competitive housing market, renting can provide access to coveted neighborhoods that may be out of reach for buyers. The Advantages of Owning a Home in Toronto Building Equity The most significant advantage of homeownership is the opportunity to build equity over time. Furthermore, As you pay down your mortgage, you invest in your future. Stability and Control Owning a home offers a sense of stability and control over your living space. You can make renovations and personalize your home to your liking. Potential for Appreciation  Historically, Toronto’s real estate market has shown appreciation over time. This means your property may increase in value, providing a potential financial benefit. Tax Benefits Homeowners in Toronto can benefit from various tax deductions and incentives, which can help reduce their overall tax burden. The Cons of Renting in Toronto Limited Control Renters have less control over their living space. They must adhere to the landlord’s rules and may have restrictions on making changes to the property. No Equity Building Renting does not build equity, so renters miss out on the wealth-building aspect of homeownership.  Rent Increases  While rent may be stable, it can also increase over time, making long-term budgeting less predictable.  No Potential for Appreciation Unlike homeowners, renters don’t benefit from potential property appreciation. The Downsides of Owning a Home in Toronto High Initial Costs Buying a home in Toronto often requires a substantial down payment, which can be challenging for many individuals. Maintenance Responsibilities Homeowners are responsible for property maintenance, repairs, and ongoing costs, which can be financially burdensome. Market Fluctuations  Real estate markets can be volatile. Homeowners may face challenges if property values decline unexpectedly. Reduced Flexibility Homeownership ties you to a specific location, which can be less than ideal if your circumstances change. In conclusion, the decision between renting vs. owning in Toronto ultimately depends on your individual preferences, financial situation, and long-term goals. Renting offers flexibility and lower upfront costs, while owning provides stability, equity-building potential, and tax benefits. Carefully consider these factors to make the choice that aligns with your unique needs and aspirations in the vibrant city of Toronto. Related posts 05 September 2023 The Toronto Real Estate Dilemma: Renting vs. Owning The Toronto Real Estate Dilemma: Renting vs. Owning In the bustling city of Toronto, finding the perfect… 03 September 2023 Canada’s Real Estate Bracing for Historic Price Plunge: RBC Canada’s Real Estate Bracing for Historic Price Plunge: RBC Canada’s biggest bank, RBC, believes… 29 August 2023 Ontario’s Closing Process: A Comprehensive Guide Ontario’s Closing Process: A Comprehensive Guide Welcome… 29 August 2023 Tips on Navigating the Real Estate Closing Process in Ontario Tips on Navigating the Real Estate Closing Process in Ontario Embarking on the journey to own your dream… 29 August 2023 FAQs: Navigating the Real Estate Closing Process in Ontario FAQs: Navigating the Real Estate Closing Process in Ontario What’s the difference between a deposit… 23 August 2023 Deposit protection lowers homebuying stress Deposit protection lowers homebuying stress When you put down… 17 August 2023 What is the First Savings Account for your home? What is the First Savings Account for your home? Canadians are breathing a sigh of relief as inflation…